Missouri compromise fails to lure in $133 million

Missouri’s effort to secure $133 million federal dollars to expand unemployment benefits has been denied, because a compromise measure didn’t meet federal demands.

Congress offered Missouri the money to extend unemployment benefits to residents who lost jobs because of family illness, domestic violence or dislocation of a spouse. Unemployed workers in training programs would see benefits extended from 26 weeks to 52. The money came with a catch. To get the extra money for the next two years, the state would have to make the expansions permanent.

Missouri lawmakers sought a compromise and made the expansion temporary in HB 1075 . The federal Labor Department rejected the compromise.

Mehan says everyone knew the risk, that the federal government would likely reject the proposal. But Mehan insists the state didn’t have a choice, that businesses couldn’t accept temporary funding in exchange for costly, permanent changes. Businesses pay into the unemployment compensation fund. State labor officials estimated that making such permanent changes would have cost anywhere from $28-to-94 million a year.

The recession has hit Missouri hard. The state unemployment rate is 9.3%.

With federal disapproval, where does this leave Missouri?

"Exactly where we are," Mehan tells the Missourinet. "The (unemployment compensation) trust fund is in the red. We’re going to have to borrow to pay claims. We’re going to have to probably have to have a significant legislative solution to fix it for the future."

Mehan says the legislature will have to address the issue next year and any solutions will come at a cost.